A British Virgin Islands court reportedly ordered cryptocurrency hedge fund firm Three Arrows Capital (3AC) into liquidation. 3AC must now formally liquidate assets tied to its British Virgin Islands company. It’s still unclear what assets Three Arrows Capital has or what this means for its creditors.
According to Sky News, Three Arrows Capital (3AC), the crippled crypto hedge fund firm, has been ordered into liquidation by a British Virgin Islands (BVI) court.
On Monday, a BVI court reportedly ordered 3AC to liquidate its assets. Partners from global consulting firm Teneo Restructuring were said to be managing 3AC’s insolvency. 3AC is headquartered in Singapore but incorporated in BVI.
Restructuring units, like Teneo, mainly focus on protecting the assets of the liquidated company as well as determining who its creditors are.
According to Blockworks, two Teneo operatives have been appointed to lead 3AC’s liquidation process. Teneo will now set up a website via which creditors can make claims against 3AC, according to one source familiar with the matter.
Founded in 2012 by cryptocurrency investors Su Zhu and Kyle Davies, Three Arrows Capital operated crypto hedge funds as well as served as venture capitalists across the digital asset space.
Over the past few weeks, 3AC has been dogged by insolvency rumors, including that it suffered upwards of $400 million in liquidations as cryptocurrency markets collapsed between May and June.
Blockchain project Kyber Network, in which 3AC had invested, later detailed the firm’s treasury management services, which involved entrusting a portion of its capital with 3AC for potential profit. Those funds are still unaccounted for. Also, 3AC offered its backed startups an 8% annualized yield on treasury assets it managed.
The full extent of 3AC’s financial strife was confirmed last week when digital asset manager Voyager Digital revealed that 3AC had failed to make payments on loans of $350 million in USDC and 15,250 BTC ($306 million).
On Monday, Voyager Digital issued 3AC a notice of default – the same day a BVI court ordered the firm into liquidation.
Recently, Su Zhu, the co-founder and CEO of 3AC, also admitted that he was wrong about the “Supercycle Thesis,” but he remains optimistic about the crypto. Before, he predicted that the crypto market would enter a Supercycle in February 2021.